Govt begins IRCTC disinvestment, invites bids from merchant bankers

The government began the process of selling a part of its stake in the Indian Railway Catering and Tourism Corp (IRCTC) and invited bids for the same from merchant bankers on Thursday.

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The government began the process of selling a part of its stake in the Indian Railway Catering and Tourism Corp (IRCTC) and invited bids for the same from merchant bankers on Thursday. This move will help the government get closer to the FY21 disinvestment target of 2.10 trillion.

The government currently holds 87.40% stake in the IRCTC and is aiming to bring it down to 75% in accordance with the SEBI norms.The merchant bankers have a deadline of 10th September. 

“The GoI intends to disinvest a part of the paid up equity capital of IRCTC out of its shareholding through ‘Offer for Sale (OFS) method of shares by promoters through the stock exchanges’ as per Securities and Exchange Board of India (Sebi) Rules and Regulations” the department of Investment and Public Asset Management (DIPAM) said as quoted by PTI. IRCTC is a subsidiary of the Indian Railways, with monopoly in tourism, catering, online ticket-booking service and providing packaged drinking water in all the railway station and trains. 

DIPAM had not been able to proceed with stake sales of any Central Public Sector Enterprises (CPSE) like Air India and BPCL, in the current fiscal year because of the Coronavirus situation. Restrictions on international travel affected the disinvestment deals but DIPAM Secretary Tuhin Pandey said that completion of the deals remains a priority for the government. The government had approved the listing of 5 railway companies in 2017 and with IRCTC also listed, only the Indian Railway Finance Corporation is left, which will likely be listed later this fiscal year.

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